DENTSPLY INTERNATIONAL INC. v. HU-FRIEDY MFG CO.

The opinion of the court was delivered by: CHRISTOPHER CONNER, District Judge

MEMORANDUM

Presently before the court in this patent infringement case is
a motion by plaintiffs, Dentsply International Inc. and Dentsply
Research and Development Corp. (collectively "Dentsply"), for
sanctions against defendant, Hu-Friedy Manufacturing Company,
Inc. ("Hu-Friedy"), for failure to supplement prior discovery
responses as required by the Federal Rules of Civil Procedure. At
issue is an application to the United States Patent Office in
which Hu-Friedy requests issuance of a patent for the same
process that is the subject of the infringement claims sub
judice, relating to the method of manufacturing a "tip" used in
dental cleaning.*fn1 The application concededly falls within
a request for production of documents served by Dentsply on
Hu-Friedy last year, but it was not produced until last Friday,
more than five months after the close of fact discovery and less
than ten days before commencement of trial. Oral argument on the motion was held earlier today.*fn2
Dentsply asserts that the patent application contained an
admission that the "separate" tip of the Dentsply design is
interchangeable with the "integral" tip of the Hu-Friedy design,
and that the failure to disclose the application precluded
Dentsply from investigating this issue prior to trial. It asks
the court to find, as a discovery sanction for the late
disclosure, that these components of the Dentsply and Hu-Friedy
products are equivalent as a matter of law for purposes of
infringement analysis.*fn3 Hu-Friedy admits error in failing
to disclose the document, but argues that the mistake was
inadvertent  the result of miscommunications between patent and
trial counsel  and that the patent application has been in the
public record and available to Dentsply since December 2004. It
also contends that the application does not contain the express
admission suggested by Dentsply and that a partial finding of
equivalence would represent an unwarranted penalty. The court took the matter under advisement with the promises
that an opinion would issue today and that the ruling would not
please either party. These results have been achieved.

Federal Rule of Civil Procedure 37(c) provides for the
imposition of sanctions upon a party that, "without substantial
justification," fails to supplement a prior response to
discovery. See FED. R. CIV. P. 37(c). Hu-Friedy concedes that
the patent application falls within a request for production of
documents served by Dentsply last year, and that it had a duty to
disclose the application to Dentsply by December 2004 at the
latest.*fn4 It also concedes that these documents were not
in fact disclosed to Dentsply until last week, more than a year
after the application was first submitted to the United States
Patent Office.

The excuses offered by Hu-Friedy  that the failure to disclose
was inadvertent and that the material was publicly available as
of December 2004  do not constitute "substantial justification"
for the error. A discovery violation may be justified on grounds
of mistake when the omission occurred despite due diligence on
the part of counsel and client. See, e.g., Tolerico v. Home
Depot, 205 F.R.D. 169, 175-76 (M.D. Pa. 2002). This is not such
a situation. The patent application was prosecuted on behalf of
Hu-Friedy by the same law firm that represents the company in
this litigation. The subject of the patent application is the
same as the subject of the infringement claims in this case. The
patent attorney who prepared the application is the same attorney who prepared a
legal opinion letter in support of Hu-Friedy's defense against
Dentsply's claims. And, indeed, litigation counsel for Hu-Friedy
noted the pendency of the application on privilege logs submitted
in this case. The patent application, and its potential relevance
to the claims in this case, should have been easily recognized.
The failure to disclose the application  even if inadvertent 
was not substantially justified.

The other excuse offered by Hu-Friedy  that the application
was available publicly after December 2004  is simply
immaterial. The duty to supplement does not abate when documents
become part of the public record. To the contrary, the federal
discovery rules are designed to require disclosure of information
generally without consideration of alternative means of access
available to the requesting party. See, e.g., 8 CHARLES ALAN
WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 2014 (3d ed.
2002). That the patent application was in the public record after
December 2004 does not provide justification for Hu-Friedy's
failure to disclose after that time.

While sanctions are clearly appropriate in this case, the
nature of those sanctions is a more difficult question. Several
factors are relevant to this issue, including harm to the
opposing party and the willfulness of the violation. The ultimate
goal of sanctions  and the ultimate limitation on their scope 
is placement of the prejudiced party in approximately the same
litigation position that it would have occupied absent the discovery violation. See,
e.g., Quinn v. Consol. Freightways of Del., 283 F.3d 572, 576
(3d Cir. 2002).*fn5

Clearly, Dentsply has been prejudiced by the late disclosure.
The patent application includes statements by representatives of
Hu-Friedy that are arguably inconsistent with positions taken by
the company in this litigation. Had this information been
disclosed earlier, counsel for Dentsply could have deposed
Hu-Friedy employees and witnesses about these inconsistencies,
garnered additional testimony regarding the equivalence of the
designs, and pursued further investigation into these facts.
These avenues are now closed, and counsel for plaintiff will be
required to question these witnesses at trial without the benefit
of prior deposition exchanges.

It is also clear that Hu-Friedy's conduct approaches, if not
reaches, the level of willfulness. Notwithstanding defense
counsel's representations that these mistakes were unintentional
 and the court credits defense counsel's candid explanation for
these errors  they should have been avoided, and the
responsibility for the late disclosure lies entirely on
Hu-Friedy. The attorneys involved in this case should have been
aware of the pending patent application and should have disclosed
it in a timely manner. That they did not intend to "hide" the
document does not excuse the lack of oversight that underlies the
mistake. Nevertheless, the court does not believe that the sanction
requested by Dentsply, a finding of partial equivalence as a
matter of law, is appropriate. The patent application does not
contain an express admission that the tip regions of the
Dentsply and Hu-Friedy designs are equivalent. Rather, it
contains language (in the claims and specifications sections)
that arguably suggests by negative inference that these
components are interchangeable. This inference is not necessarily
justified and, even if it may be drawn, its effect is unclear.
Assuming arguendo that the patent application equates the
concepts of "separate" and "integral" tip regions, this fact does
not mandate a finding of equivalence between the Dentsply and
Hu-Friedy products. To hold that the patent application
establishes partial equivalence as a matter of law would offer a
windfall for Dentsply and would likely overcompensate for the
effects of the discovery violation.

A lesser, but related, sanction is appropriate. The prejudice
to Dentsply may be effectively and fairly remedied by accepting
the discovery violation as prima facie evidence of willfulness
for purposes of judicial estoppel. This doctrine prevents a party
from advancing a position if (1) the position is inconsistent
with an admission made in a prior judicial or administrative
proceeding and (2) the inconsistency is attributable to willful or bad faith
conduct.*fn6 By construing the discovery violation as proof
of willfulness, the court recognizes the seriousness of the
violation and Hu-Friedy's culpability, but allows the company to
explain and counter the relevance of any alleged admissions in
the patent application. It also gives Dentsply the benefit of
evidence of willfulness that might have been developed through
depositions and assures that, to the extent that the patent
application includes an admission contrary to one made by
Hu-Friedy in this case, that admission will be binding upon
Hu-Friedy. This sanction strikes the appropriate balance between
the interests of the litigants and adequately protects the
integrity of the discovery process.

The court will also direct Hu-Friedy to compensate Dentsply for
reasonable expenses, including attorney's fees, caused by the
failure to disclose. See FED. R. CIV. P. 37(c). These expenses
clearly include preparation of the motion for sanctions and
supporting briefs, and may also encompass other costs causally
linked to the late disclosure. See id. Dentsply will be
directed to file an affidavit detailing expenses for which it
claims compensation, and Hu-Friedy will be permitted to raise
objections to those expenses if appropriate. The court will
finally resolve the expenses to be assessed in a subsequent
order. An appropriate order will issue. ORDER

&nbsp; AND NOW, this 19th day of May, 2005, upon consideration of
plaintiff's motion for sanctions (Doc. 108), and for the reasons
set forth in the accompanying memorandum, it is hereby ORDERED
that the motion (Doc. 108) is GRANTED as follows:

1. Plaintiffs shall be deemed, for purposes of trial
in the above-captioned case, to have offered prima
facie evidence that defendant acted willfully with
respect to any inconsistency between positions taken
in this case and admissions in applications to the
United States Patent Office.

2. Assessment of expenses to be imposed against
defendant will be deferred pending supplementation of
the record.

a. Plaintiffs shall file an affidavit providing an
itemized list of attorney's fees and expenses for
which plaintiffs seek recovery on or before May 25,
2005. b. Defendant ...

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